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It’s a problem that is even more apparent in our rapidly growing digital media world, where the truth can be even harder to come by. Political spin, corporate agendas and even deliberately misleading material on social media all serve to muddy waters that are complicated enough, given that our understanding of the virus itself is constantly evolving.
Then there are is the uncertainty over the financial implications for both households and governments. While there is a good probability that tax hikes are on the horizon given the dire state of budgets at the municipal, provincial and federal levels, it is impossible predict with a high level of certainty what those hikes will look like nor when they will be implemented.
While Finance Minister Bill Morneau has indicated that using new taxes to pay for the record-setting deficit pose too much of a risk given the precarious state of the economy, the NDP has been aggressively pushing for a wealth tax that would place the burden solely on the wealthy.
It is not clear how this will play out, and no expert or investment industry insider has special insight, no matter what they try to tell you. Trying to implement strategies based on speculation is not only foolish but reckless and can cause irreparable financial harm if you get it wrong.
That doesn’t mean investors should avoid trying to proactively prepare, something that can be done by assigning probabilities to a range of scenarios and then researching strategies to respond to each possible outcome. A great starting point is to create a financial plan that maps out your exposure to various shocks, such as an income tax hike, capital gains inclusion changes or a wealth tax.